Hit hard by the appreciation of the Canadian dollar and weakness in the U.S. economy, Ontario exports are projected to fall seven per cent this year, Export Development Canada said Wednesday.

EDC, which is Canada's export financing and credit agency, added that the province's exports are expected to post a slim rebound of only one per cent next year.

"Ontario is exposed to weakness in the auto sector and sliding demand for industrial goods," said Peter Hall, EDC's vice-president of economics and deputy chief economist. "Both sectors are also impacted by the soaring currency."

EDC expects motor vehicle exports to fall nine per cent this year as sales in the U.S. slow, with three per cent export growth for the sector projected for 2009.

Ontario's industrial goods exports, which account for 30.5 per cent of the province's total, are seen declining by 9.5 per cent this year and 2.5 per cent next year.

EDC said the country's overall exports are forecast to fall two per cent this year and then grow by the same amount next year.